Greek Bailout Strengthens Euro
EU leaders agreed on a 30 billion Euro aid package for Greece, with the IMF adding 10 billion Euros of its own to Greek relief. The loans will be applied if needed. The interest rate on these loans is set at 5%, which seems a bit high for debt-ridden Greece, but will have to do. Greece already pays 7% or higher on its current debt.
As a result, it seems the value of the euro has increased. On Friday, the value of the euro was $1.3488. Now, it’s up to $1.3616.
If more bailouts are on the way for the EU, though, the euro may be difficult to maintain at that rate. By the time this is posted, the euro will undoubtedly fluctuate again. However, this shows that investors may have faith in the bailout plan.